Deputy finance minister vows close watch on Middle East as government accelerates crisis response

The government has determined that uncertainty surrounding the Middle East war persists following the resumption of armed conflict between the United States and Iran, and has decided to accelerate measures to stabilize energy supply, minimize financial market turbulence and ease the burden on ordinary citizens.

Heo Jang, second vice minister of the Ministry of Economy and Finance, chaired an emergency economic headquarters meeting Thursday at Government Complex Seoul, reviewing the response status of five task forces covering macroeconomics and prices, energy supply, financial stability, public welfare and overseas developments.

"Uncertainty surrounding the Middle East war continues, including the resumption of armed conflict between the United States and Iran," Heo said. "Each task force must maintain a high level of vigilance and closely monitor developments in the Middle East and their impact across all sectors."

He also urged officials to "strengthen support for vulnerable groups by swiftly implementing previously announced measures — including the Chuseok public livelihood stabilization plan, the youth employment recovery initiative and the support program for vulnerable borrowers during a period of rising interest rates — as the fallout from the Middle East war continues to weigh on people's livelihoods."

The government is preparing for potential disruptions to energy supply. Crude oil and naphtha procurement for September and October is being secured at about 90 percent of the previous year's average. To promote the introduction of alternative supplies and offset gaps caused by shipping route diversions, the government reactivated its strategic petroleum reserve swap program on Aug. 24. It also plans to continuously monitor supply-and-demand conditions and price movements for key raw materials.

Support measures to address financial market instability will continue as well. The financial stability task force had disbursed 18.7 trillion won ($13.6 billion) through policy finance support programs and 10.5 trillion won through bond and money market stabilization programs as of Tuesday.

Parallel steps are being taken to ease the public burden stemming from the Middle East war. The government is advancing its youth employment recovery plan and its support program for vulnerable borrowers facing rising interest rates. Ahead of the Chuseok holiday, it will inject a record 103 billion won into discount support for agricultural, livestock and fishery products and expand the supply of essential goods to 183,000 tons. Additional support measures, including expanded discount programs, are also being actively considered.

Support for those falling through the welfare safety net will also be strengthened. The government will conduct a welfare gap survey targeting a total of 160,000 people — including financially distressed households — from Aug. 24 to Oct. 16, and provide tailored assistance. The overseas situation management task force will monitor US sanctions on Iran along with energy supply and logistics trends.

Through coordination among related ministries, the government will work to minimize the spillover effects of Middle East risks on the domestic real economy and financial markets, while monitoring supply conditions and price movements for key raw materials and reinforcing policy responses to stabilize public livelihoods.